Tweedy Browne

Tweedy Browne

Last Update: 2014-05-14
Related: Tweedy Browne Global Value

Number of Stocks: 47
Number of New Stocks: 0

Total Value: $4,342 Mil
Q/Q Turnover: 2%

Countries: USA
Details: Top Buys | Top Sales | Top Holdings  Embed:

Tweedy Browne Watch

  • Tweedy Browne’s Second Quarter 2014 Commentary

    With the VIX (proxy for market volatility) at its lowest level since 2007, it is not surprising that investors’ tolerance for risk appears to be growing, as evidenced by the continued strength in global equities and most other financial instruments. In a fascinating study conducted by John Coates, a research fellow at Cambridge, linking risk taking to physical responses to stress, it was shown that when market volatility is high, cortisol (the “stress hormone”) levels increase, causing investor appetite for risk to decline. Conversely, when levels of market volatility are low, cortisol levels remain largely unaffected, resulting in a greater willingness on the part of investors to take on risk. One could argue that the complete transparency of central bank monetary policy around the globe, particularly in the United States, has caused the release of “one of the most powerful potential brakes on excessive risk taking in stocks.”† Whether or not we have reached bubble territory is subject to debate, but investors should be cognizant that, if risk is indeed largely predicated on the price one pays for a security, it is no time for complacency. As you well know, we are not about to make forecasts because in our mind, we are not sure from an investment standpoint that they are much better than random guesses. We think of ourselves as being in the business of chasing value, not performance, and we do know that we have to pay, on average, a whole lot more for a dollar of value today. Our experience has taught us that if we keep looking, and exercise some patience, opportunities will turn up.


      


  • Money Managers Tweedy Browne Report Largest Stocks, Topped by Johnson & Johnson

    Tweedy Browne (Trades, Portfolio) is a 93-year-old fund which focuses on undervalued securities, and which gained its investment approach from the late Benjamin Graham. The fund is owned and managed by William Browne, Thomas Shrager, John Spears and Robert Wyckoff, Jr.


    Tweedy Browne (Trades, Portfolio) had a pretty quiet quarter during the fourth quarter. The fund did not buy any new stock and sold out of two current holdings, and only made slight increases and reductions to their other current positions. The Tweedy Browne (Trades, Portfolio) fund holds 47 stocks valued at $4.34 billion.

      


  • Tweedy Browne Increases Holdings of 3 Stocks in First Quarter

    Tweedy Browne (Trades, Portfolio), the famous value firm founded in 1920 and managing $20.9 billion in assets at last quarter-end, was sparing in its purchasing in the first quarter. For the second consecutive quarter, it bought no new stocks and added to only a few. In the first quarter of the year, it added more shares to only three holdings: Banco Santander Brasil SA (BSBR), National Oilwell Varco Inc. (NOV) and Philip Morris International Inc. (PM).

    Tweedy Browne (Trades, Portfolio)’s portfolio consists of 47 stocks, most highly weighted with 29% in the Financial Services sector, followed by 21.3% in Energy and 14.8% in Health Care. The portfolio’s value totals $4.32 billion.  


  • Tweedy Browne Comments on Cenovus

    n addition to this new position, we got a trading opportunity in Cenovus (CVE), the Canadian oil sands company, and added it to the Global Value Fund and Global Value Fund II – Currency Unhedged. It had previously only been held in the Worldwide High Dividend Yield Value Fund. We also added to our positions in Banco Santander Brasil, Antofagasta, Bangkok Bank, Imperial Tobacco, and Unilever.

    From Tweedy Browne (Trades, Portfolio)'s first quarter 2014 letter to investors.  


  • Tweedy Browne Comments on Standard Chartered Bank

    In terms of portfolio activity, we established one new position during the quarter in all four of our Funds: Standard Chartered Bank (LSE:STAN), a large UK-based global bank with over 1,700 branches in 70 different markets around the globe. While Standard Chartered is domiciled in the UK, it is anything but a British bank. Founded in 1969 through the merger of Standard Bank of British South Africa and Chartered Bank of India, Australia and China, it is a bank with the bulk of its operating income derived from wholesale activities such as corporate finance, trade finance, foreign exchange, cash management, and custody services in markets such as Asia, the Middle East, and Africa. They also have a sizeable and conservative consumer business with a mortgage portfolio that is well secured by a loan-to-value ratio on its mortgages of less than 50%. Furthermore, it is a deposit financed bank that is not dependant on volatile, short term financing, as evidenced by a loan-to-deposit ratio of approximately 76%. The bank was considered a growth bank in the 2000s, somewhat immune to the problems of Western banks. It rode a wave of Asian growth and routinely traded at price/earnings ratios of 15 to 20 times earnings. Its fortunes began to change in 2011, as economic growth began to slow in a number of its most important markets. Some markets like South Korea have posed even bigger challenges, as new regulation impacted the growth prospects and the profitability of virtually all banks doing business in its jurisdiction. These factors, together with what we consider to be misplaced concerns about its capital position under Basel III and a recent management shakeup, have led its stock price to a fall from grace. This allowed us an opportunity to purchase our initial shares at approximately 9.5 times estimated 2014 earnings, 1.2 times stated book value, and what we believe to be a secure dividend yield today of over 4%. Standard's management still considers the bank to be a growth bank; however, it acknowledges that near-term growth will be lower than that enjoyed in the 2000s. We believe that a conservatively financed global bank that services many of the fastest growing parts of the world where middle classes are on the rise over the longer term and that is priced in the stock market at a significant discount to what we believe is a conservative estimate of its intrinsic value is worth a diversified bet in our Funds' portfolios.

    From Tweedy Browne (Trades, Portfolio)'s first quarter 2014 letter to investors.  


  • Tweedy Browne First Quarter 2014 Letter to Investors

    After a strong year-end finish, global equity markets plateaued in the first quarter of 2014 as slowing growth in emerging markets and increasing tension in a number of regions slowed the building equity market momentum of 2013. On a relative basis, the Tweedy, Browne Funds responded well to this more unsettled environment with all four of our Funds besting their benchmark indices for the quarter. Most longer term performance comparisons continue to be quite favorable.


      


  • Cheap Stocks: Financially Devastating or Fantastic?

    Will cheap stocks make you rich, or destroy your portfolio?


    There’s a sure bet in the stock market that almost nobody plays. It’s a bet that will virtually guarantee you large returns over the course of your life.

      


  • Tweedy Browne's William Browne Speech to Ivey Business School



  • Money Managers Tweedy Browne Report New Stocks, Topped by Johnson & Johnson

    Tweedy Browne (Trades, Portfolio) is a 93-year-old fund which focuses on undervalued securities, and which gained its investment approach from the late Benjamin Graham. The fund is owned and managed by William Browne, Thomas Shrager, John Spears and Robert Wyckoff, Jr.


    Tweedy Browne (Trades, Portfolio) had a pretty quiet quarter during the fourth quarter. The fund did not buy any new stocks or sell out of any current holdings, and only made slight increases and reductions to their current positions. The Tweedy Browne (Trades, Portfolio) fund holds 49 stocks valued at $4.3 billion.

      


  • Tweedy Browne Comments on Antofagasta

    Portfolio activity was once again modest duri ng the quarter. Only one new position was established: Antofagasta (LSE:ANTO), a UK-listed Chilean coppe r mining company. The company owns majority interests in five copper mines in Chile and a railw ay, and we believe is a we ll run, low cost copper producer with a strong balance shee t. The company is profitable, gene rates free cash flow, and pays a dividend. While it is difficult to predict the direction of copper pr ices with any degree of certainty, declining ore grades and mine clos ures across the world should have a meaningful effect on supply over the next several years, resulting in better pricing in the future. At purchase, Antofagasta was trading at approximately 6.2 times enterprise value to EBIT (ear nings before interest and taxes), which was near its 52-week low, was in a net cash positi on and paid a dividend yield of 1.6% . We also added to a number of pre-existing positions in our Funds, including DB S Group, GlaxoSmithKline, HSBC, TNT Express, and G4S.


     

      


  • Tweedy Browne Fund Fourth Quarter 2013 Commentary

    Global equity markets shrugged off concerns abou t central bank tapering and continued to gain momentum in the fourth quarter, capping off another excellent year for equity returns. Despite carrying cash reserves that ranged from approximately 10. 9% to as much as 20.3%, a ll four of the Tweedy, Browne Funds finished the quarter and year on a str ong note, producing annual returns between 18.77% and 22.68%.


    As we write, the S&P 500 and the MSCI World Index are near or at all-time highs; the cyclically adjusted Shiller P/E is at 26X earnings versus 15. 9X earnings for its long term median; global IPO markets are heating up; corporate lending standards are once again deteriorating (covenant-lite loans are back); and many of the stocks we own and follow ar e now trading at or near our estimates of intrinsic value. That said, we are comfortable with our port folios' current holdings, and continue to search the globe for individual securities that fit our demand ing criteria. While bargain hunting is currently challenging, we remain confident that our patience will be rewarded. 

      


  • Tweedy Browne Comments on National Oilwell Varco

    National Oilwell Varco (NOV)'s stock symbol is NOV, and industry experts insist it really stands for "no other vendor" as it is the almost universally preferred manufacturer of offshore drilling rig equipment in the global oil & gas industry. It has a leading market position in the segments of the oil & gas industry that are generating the most growth, deepwater drilling and shale drilling. The company has historically generated high returns on capital, has what we believe to be a conservative balance sheet with minimal debt, and, given the uncertainty associated with near term growth of drilling equipment orders, we were able to purchase shares at a significant discount to our estimate of the company's intrinsic value.

    From Tweedy Browne's 2013 semi-annual report.  


  • Tweedy Browne Comments on Banco Santander

    Banco Santander (Brasil) represents our first investment in a Brazilian company. With emerging markets such as Brazil contracting somewhat as China slows, and money moving out of emerging markets based on expectations of a change in U.S. Federal Reserve monetary policy, we were afforded a pricing opportunity in what we believe to be a very attractive bank. Although Banco Santander S.A. (BSBR), a large Spanish bank, is a significant shareholder of Banco Santander (Brasil), the Brazilian bank is an independently listed subsidiary with its own management team, board of directors, and capital base. At initial purchase, Banco Santander (Brasil) was trading right around tangible book value, below 10 times 2013 estimated earnings, and had a dividend yield of approximately 5%. For a bank, it is extremely underleveraged (19.9% Tier 1 capital ratio), has high net interest margins, and among its three local competitors, has the highest consumer exposure to what we believe will continue to be a rapidly growing middle class over the longer term in Brazil.

    From Tweedy Browne's semi-annual 2013 report.  


  • Tweedy Browne Investment Adviser’s Letter to Shareholders - Semi-Annual Report

    "Everything is in a state of flux, including the status quo." – Robert Byrne

    The above quote would certainly seem to contain a modicum of truth, and if your basis for subscribing to this adage rested on reading the financial press, you might well conclude it contains a healthy dollop rather than just a modicum. For example, Japan, which has been off the radar screen of investor attention for many years, reemerged with Prime Minister Abe's plan to breathe new life into an economy which has been moribund for years. Investors including Mrs. Watanabe (a Japanese term for stock and currency speculators) decided not to wait for hard evidence that Prime Minister Abe's "three arrows agenda" for turning around the economy would succeed, and have bid up the Nikkei Index 65% over the last twelve months. We will comment a bit more on this later but, briefly, we are not yet convinced that a new day has dawned in Japan and have on balance sold down some of our Japanese holdings based on some very full if not overly generous individual company valuations. Japan is walking a tightrope as it tries to emerge from a prolonged period of almost non-existent economic growth while managing a public debt over twice the size of the economy and at the same time not triggering a large rise in the government cost of borrowing, which is currently well less than one percent for a ten-year bond.  


  • Tweedy Browne – Third Quarter Stock Buy

    Founded over 90 years ago, Tweedy Browne is a $19 billion investment firm still following in the steps of Benjamin Graham. Their funds returned a solid 5.3% and 8.47% for the third quarter, but the stock market’s continued climb reduced the number of undervalued opportunities. As the firm’s managers write in their third quarter letter:

    “Cash reserves in all four of our Funds have been slowly but steadily increasing over the last year as global equity markets gained momentum. As valuations have climbed, risks now appear somewhat higher. Bargain hunting remains challenging, but we have plenty of dry powder should the markets present us with an opportunity.”  


  • Tweedy Browne Global Value Fund Reduces One in UK, Two in Japan

    The third quarter portfolio of the Tweedy Browne Global Value Fund (TBGVX) shows 102 stocks, two of them new. The fund’s total value is $5.69 billion, with a quarter-over-quarter turnover of 2%. The portfolio is currently weighted with top three sectors: consumer defensive at 20.3%, financial services at 20.2% and consumer cyclical at 13.4%. As of Sept. 30, 2013, the fund is returning 14.20% year-to-date, compared to 18.39% in 2012.

    In the third quarter of 2013, the Tweedy Browne Global Value Fund reduced these three stocks that trade on the London Stock Exchange (LSE) or the Tokyo Stock Exchange (TSE). Prices are quoted in GBP or £ (1 GBP = $1.62 USD), as well as JPY or ¥ (1 JPY = $0.01 USD).  


  • Tweedy Browne Comments on Cenovus

    We also added Cenovus (CVE) to the Worldwide High Dividend portfolio during the quarter. This Canadian oilsands operator has a strong production growth profile with low cost in situ oilsands reserves. At purchase, Cenovus was trading at a substantial discount from our estimate of intrinsic value and was paying a dividend yield of 3.2%.

    From Tweedy Browne's third quarter 2013 commentary.  


  • Tweedy Browne Company Third Quarter Commentary

    While global equity markets were buffeted somewhat in the 3rd quarter by macro events such as the Syrian civil war, budget and debt ceiling issues in the U.S., and ongoing concerns about China's growth, it was not enough to stop the markets' strong upward momentum. All four Tweedy, Browne Funds finished the quarter on a positive note, producing returns between 5.30% and 8.47%, despite carrying cash reserves that ranged from approximately 9.5% to 21.4%.

      


  • Tweedy, Browne Comments on National Oilwell Varco

    The other new holding is National Oilwell Varco (NOV), a leading global manufacturer of drilling rig equipment and consumables to the energy industry. It has a leading market position in the segments of the oil & gas industry that are generating the most growth, deepwater drilling and shale drilling. The company has historically generated high returns on capital, has what we believe to be a conservative balance sheet with minimal debt, and at purchase was trading at a significant discount to our estimate of the company's intrinsic value.

    From Tweedy Browne's second quarter 2013 letter.  


  • Tweedy, Browne Buys 2 New Stocks

    Tweedy, Browne, a global value investment firm with $15.6 billion in assets under management, has been pursuing Ben Graham-style, undervalued stocks for 93 years. From the bottom of the financial crisis in March 2009 through the second quarter, Tweedy, Browne’s funds have compounded on an average annual rate between 19.27% and 21.07%.

    In the last 12 months, returns have fallen short of the benchmark as the managers increased their cash reserve and had only marginal exposure to the roaring Japanese market. As they explained in their second quarter letter:  


Add Notes, Comments or Ask Questions

User Comments

No comment yet



Get WordPress Plugins for easy affiliate links on Stock Tickers and Guru Names | Earn affiliate commissions by embedding GuruFocus Charts
GuruFocus Affiliate Program: Earn up to $400 per referral. ( Learn More)
Free 7-day Trial
FEEDBACK
Email Hide